Surat: Prime Minister Narendra Modi's call to Indians to stop purchasing gold for a year to conserve foreign exchange could have significant repercussions on employment and domestic trade, according to stakeholders in the gems and jewellery sector. While expressing support for the appeal and acknowledging its importance, leaders from prominent trade bodies such as the Gem and Jewellery Export Promotion Council (GJEPC) and the All India Gem and Jewellery Domestic Council (AIGJDC) have warned that a blanket reduction in gold jewellery purchases may impact approximately 1 crore jobs across India. They stated that these bodies are actively working to address the concerns raised by the Prime Minister while mitigating adverse effects on the industry.
According to trade estimates, nearly 1 crore people are directly or indirectly dependent on the gems and jewellery sector for their livelihoods. A sharp decline in domestic jewellery consumption could adversely affect workers, artisans, traders, polishers, small retailers, machinery manufacturers, and related sectors such as banking across the country. Kirit Bhansali, Chairman of GJEPC, emphasized that apart from those directly involved in diamond, gemstone, and jewellery manufacturing, a vast sales and services network relies on the sector. He noted that machinery manufacturing, packaging, and a significant portion of hospitality and other services are also dependent on it. Bhansali added that the industry is collaborating with the government to find solutions, as it has done in past challenging circumstances.
The appeal comes at a time when the industry is already under pressure from weak global demand and geopolitical tensions affecting key export markets. Industry voices highlight that domestic demand has become particularly crucial as international markets remain uncertain. The United States continues to be a major destination for Indian diamonds, while China, once a leading market, has slowed significantly. According to a De Beers report, India has now replaced China with a 12% share in the global diamond market.
Traders argue that jewellery consumption within India plays a vital role in sustaining the sector when exports weaken. A prolonged decline in purchases, they fear, could deepen stress in an industry already grappling with reduced overseas orders. The concern is that a yearlong pause in gold jewellery buying may save foreign exchange but could also disrupt livelihoods on a massive scale. Rajesh Rokde, Chairman of AIGJDC, reiterated that the industry supports the Prime Minister's statement given the current context, but fears an impact on around 1 crore jobs across manufacturing, sales, and supporting systems like banking, insurance, packaging, and logistics. He mentioned plans to meet with the Prime Minister to discuss ways to address government concerns while protecting the industry from adverse effects. Rokde also noted that the gems and jewellery sector contributes about 7% of the country's GDP.
Jagdish Khunt, President of the Surat Diamond Association, remarked that the Prime Minister's suggestion is important in the current situation and that the industry needs to explore alternatives to keep operations running. He suggested that recycling old jewellery could support the industry, as gems used in such pieces require recutting and polishing once removed from the jewellery.
